BEIJING, Oct. 17 (Xinhua) -- The latest consensus reached between China and the European Union (EU) on hybrid vehicle trade is expected to reduce policy uncertainty, stabilize market expectations and safeguard the interests of businesses and consumers on both sides, paving the way for more predictable and mutually beneficial cooperation in the sector, analysts and industry representatives said.

Guided by the principles of mutual respect and equal consultation, the two sides, in the consensus reached during the latest meeting of the China-EU trade and investment consultation mechanism in Beijing, emphasized and confirmed three basic principles regarding hybrid vehicles: compliance with World Trade Organization (WTO) rules, non-discrimination and respect for facts.

Under the arrangement, China retains all its rights under the WTO framework, including the right to seek dispute settlement and trade compensation, while Chinese products will not be subject to discriminatory treatment. The arrangement also uses the trade volume recorded in 2025 as a baseline, allowing room for continued growth in Chinese hybrid vehicle exports to Europe.

The consensus comes against the backdrop of rapidly expanding Chinese hybrid vehicle exports to the European market. In 2024, the EU imposed additional countervailing duties of up to 35.3 percent on Chinese-made battery electric vehicles, while hybrid vehicles were not subject to the additional tariffs.

Chinese hybrid vehicle exports to Europe subsequently surged. According to Eurostat, the EU imported 107,000 hybrid vehicles from China in 2024, with the figure rising to 302,000 in 2025.

Fu Xin, a senior partner at Jincheng Tongda & Neal Law Firm in Beijing, described the outcome as a breakthrough, noting that using the 2025 volume as the baseline accommodates the reasonable concerns of the Chinese automotive industry and its expectations for stable growth.

"Admittedly, quota restrictions will constrain excessively rapid growth by Chinese automakers, but they will encourage companies to compete on quality and pursue higher profit margins through higher-value-added products, in line with China's broader goal of promoting high-quality foreign trade development," noted Shi Xiaoli, director of the WTO Law Research Center at the China University of Political Science and Law.

For Chinese automakers, one of the most immediate benefits of the consensus is a substantial reduction in policy uncertainty surrounding exports to Europe.

Fu noted that growing uncertainty in trade and investment policies in recent years has made it increasingly difficult for Chinese automakers to formulate long-term business strategies.

The latest consensus, he said, will give Chinese companies operating in Europe a more stable framework of rules for the foreseeable future, allowing them to plan exports, investment and production with greater confidence.

Chinese automaker BYD said the consensus has effectively managed trade differences, prevented further escalation and taken into account the realities and legitimate concerns of industries on both sides, creating favorable conditions for sustainable cooperation.

At the 2026 Paris Motor Show, BYD Executive Vice President Stella Li disclosed the company's plans to expand its manufacturing presence in Europe. BYD's plant in Hungary is scheduled to begin large-scale production in the fourth quarter of this year. The company is also planning to establish its second and third manufacturing facilities in Europe, with France among the potential locations.

European automakers have extensive experience in automotive hardware, design and vehicle lifecycle management, while Chinese companies have competitive strengths in battery supply chains, intelligent driving and software technologies. These complementary advantages offer considerable scope for technological cooperation between the two sides, analysts noted.

Highlighting the strong complementarity between the two industries, Chinese carmaker Chery Group said closer cooperation would benefit businesses and consumers on both sides while contributing to the stability of global automotive supply chains.

Cooperation between Chinese and European companies could combine their respective strengths to improve vehicle quality, noted Andrea Levy, president of the Turin Motor Show.

Beyond the immediate benefits for trade, experts said that against the backdrop of rising trade protectionism and growing uncertainty across the global economy, the choice by the two major economies of dialogue over confrontation to resolve differences sends a positive signal in itself.

The China Association of Automobile Manufacturers said managing differences through institutionalized consultations and resolving disputes through cooperation rather than confrontation represented a rational choice that served the fundamental interests of both sides.

Responding to claims that the consensus was the result of EU pressure, a spokesperson for China's Ministry of Commerce stressed Friday that the understanding on hybrid vehicle trade is reciprocal and mutually beneficial, dismissing such claims as entirely unfounded.

The purpose of China-EU economic and trade consultations is to properly manage differences and address each other's concerns through dialogue and consultation, the spokesperson said, calling on both sides to demonstrate sincerity in resolving problems.

The spokesperson also stressed that the EU should not expect to gain benefits by exerting pressure, nor should it underestimate China's determination and ability to safeguard its own interests.